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Maytag's Board Now Backs Bid By Whirlpool

8/22/2005 02:00:00 AM Eastern

Maytag's board has withdrawn its support of the $14 per share acquisition agreement with Triton Acquisition Holding in light of Whirlpool's latest $21 per share offer.

The board, which had rejected two prior Whirlpool proposals, determined that the latest package “is more favorable from a financial point of view to Maytag shareholders and is reasonably capable of being completed.”

The board said a key sticking point had been possible antitrust issues stemming from a Whirlpool-Maytag merger. But those concerns were allayed by Whirlpool's assurance of a “complete lack of opposition to the transaction” from its 20 largest dealers and buying groups — including the top four retailers and top three buying groups which together represent 90 percent of white-good sales at retail.

Triton, an acquisition partnership led by Ripplewood Holdings, had until Friday, Aug. 19, to make a counteroffer before Maytag could formally terminate their merger agreement. Termination by either party entitles Triton to a $40 million kill fee which Whirlpool has agreed to pay — along with $15 million to retain Maytag employees and $120 million in “reverse break-up” fees should Federal regulators dash the Whirlpool-Maytag deal.

As a result of these developments, Maytag has pushed its scheduled shareholder vote back a second time, to Sept. 9.

Jeff Fettig, Whirlpool's chairman, president/CEO, said, “We welcome the determination by the Maytag board … that ours is a superior proposal and look forward to the signing of a definitive agreement with Maytag.” To that end, Whirlpool has extended the deadline for accepting its proposal to Aug. 23.

A merger with Maytag would make Whirlpool the world's largest major appliance manufacturer, giving it a wider basket of coveted brands including Amana, Hoover, Jenn-Air and Maytag. The deal would also lend it greater leverage with parts and raw materials suppliers, whose prices have risen dramatically in recent months amidst the rising cost of steel and plastic.

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